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With the economy still down and the threat of redundancies hanging over many buyers, many first time home owners are afraid to make the large leap even with the mortgage ratestaking a turn downwards. Due to this fact, instead of heading into the banks to take up a mortgage loan many buyers are now instead heading towards the rental market looking for a place that they can rent to avoid the threat of foreclosure or the unknown occurring causing them to drown in debt.

Adding to the fact that many new home owners are afraid to take the plunge is that with the credit crises many potential first time home buyers simply cannot get approved for a mortgage. Due to the fact that extremely great credit is needed now to secure a loan, a large amount of first time buyers without the credit history cannot get approved for the large loan that they need. Therefore, even with the average mortgage ratedecreasing they still cannot get their feet onto the housing market pushing them into rentals helping to propel the rental market even more.

With this thought in mind, those who can afford to make an investment into the rental market will want to do so as now is the time to reap large rewards for their small housing purchases. Although you will need to have a deposit in order to get into buy to let mortgagerates, the turnaround will be quick since you will quickly be able to see the rental returns. As there is a large amount of renters and a shortage of rental properties finding tenants should not be a problem allowing you to quickly benefit from your investment in the short term as well as the long term when it comes time to sell and move on.

More than £2 billion-worth of transactions were completed during the past month, a figure that would appear to indicate that the commercial property market in central London has retained both its resilience during tougher economic times as well as its perennial attraction to foreign buyers and investors.

According to Stephen Down, who is the managing partner at specialist central London-based investment consultancy, Gresham Down Capital Partners, the recent trend has abated fears of excess market stock dampening market appeal.

‘Five weeks ago the fear was that there was too much stock on the market but the appetite of buyers has been voracious,’ he commented.

The American opportunity fund, Carlyle, has recently acquired six office buildings in London, including the White Tower portfolio. They made the acquisition from official receivers at a cost of more than £670 million.

Stephen Down’s company has, itself, recently advised a private investor from Eastern Europe who has recently bought Mitsubishi Estate Company’s Bow Bells House, which is a prime city asset. The property was acquired for £140 million. Down commented that, as a result of the current paucity of debt, the majority of recent buyers have been largely equity rich.

City of London office rentals have climbed by nearly 12% during the past three months, and by 24% over the past half year. Construction starts have been particularly hard hit in the City, and has led to tenants landed into bidding wars over the scarce supply of Grade A property space. The end result of this is that rents are driven upwards.

Mr Downs also commented that there is more and more evidence that Korea, Chinese and Malaysian investors are entering the prime London market.

‘Chinese entrepreneur Joseph Lau has been reported at the preferred bidder on the £300 million Tower 42 but we know there are a number of other Far Eastern institutions and private investors that have targeted London because of the liquidity and transparency of the market but also because of the weakness of sterling,’ Mr Downs commented.

According to industry experts, poor inventories currently cost UK landlords around £12 million per year in lost claims due to the fact that the absence of prepared evidence counts against them in deposit disputes. Since the Tenancy Deposit Protection Scheme was introduced back in 2007, it has been firmly incumbent upon the landlords to prove their case. As a result, however, of improperly prepared inventories and a paucity of real evidence, it is now claimed that landlords have lower than a 1-in-10 prospect of prevailing in the event of a dispute.

There were 23,500 deposit disputes in 2009, and this figure has been growing at a rate every year. Also during 2009, 92% of all cases were decided in favour of the tenant and cost landlords approximately £12 in lost claims according to figures from the Video Inventory Agency.

According to Frazer Fearnhead, founder of the TDPS, the new system is vital in order to protect tenants, although he states that the residential property market in general “has been consistently undermined by incomplete or sub-standard inventories.”

‘When it comes to inventories, landlords have traditionally got away with the bare minimum. In my time I have seen inventories that have been scribbled on the back of an envelope. However, since 2007, the balance of power has swung in favour of the tenant. This is positive since many would-be cowboys have been pushed out of the market. However, it also means that law abiding landlords are losing money unnecessarily,’ Mr Fearnhead explained.

Mr Fearnhead began TVIA after facing a deposit dispute in one of his properties, when an incomplete photographic inventory resulted in a lack of evidence to back up his case. After the case, he was determined to protect the property-owning community.

To this end, the TVA offers landlords up-to-date video inventories designed specifically to protect the assets of landlords. Each inventory uses similar practices to those found in police standard procedures in filming crime scenes, and every written inventory is supported by high definition video evidence t is specifically designed to be presented in court. Mr Fearnhead is convinced that landlords should avail themselves of the service, as video evidence “offers no room for debate.”

Throughout the UK the upcoming election and what it could mean to the housing market is a primary issue on many people’s minds. Given that the vast majority of residents in the UK are home owners (roughly 70%) compared to much lower figures found in other parts of Europe (with France reportedly having only 54% of residents being home owners and Germany a mere 43%) UK properties and the issues that affect them are being looked at closely, particularly with many people who are not seeking a first-time mortgage and simply wish to re-mortgage a property in the hopes of helping to give themselves an advantage in pulling out of the debt hole the recent recession caused.

Right now the major issues most people are facing are twofold: how will the stamp duty holiday affect them and their home purchase, and how will the current overall lack of supply of available property factor in to their own home in the future.

These two issues have been of particular interest for some time now for anyone looking to lock-in the best mortgage rate possible for their home purchase in the near future, especially ever since the initial decline in house purchases began in January when last year’s stamp duty holiday and most home purchases ended. Given the number of committee changes seen in the past by the labour party in regards to the housing sector (with 9 total groups being changed in the past 13 years) it is difficult to anticipate just what may be seen in the coming months following the election, however at the same time a change to the overall way things work may be just what is needed to jump-start the faltering real estate sectors in some areas such as Northern Ireland where house prices have already fallen by a total of 3%.

A Royal Institution of Chartered Surveyors working group has claimed that the UK property industry contains definite transparency gaps with regards to the professional fees charged, and that thorough regulation is required in the real estate sector in the UK. The RICS working group also discovered a number of examples of bad practise as well as inconsistencies in the level of openness regarding the professional fees charged within the industry. The report says that, as a result, customers in the real estate market end up being unaware of what exactly the are paying for when they purchase services.

The RICS has called upon the government to launch a review in order to significantly improve industry regulations, as the report details that consumers in the real estate sector want a clear and detailed breakdown of all professional fees charged, including commission earned, as well as all relevant information necessary in order for them to make fully informed decisions and choices. The President of the RICS and Chairman of their Working Transparency Group, Max Crofts, stated that the group has witnessed a change in the banking world whilst working on the report. He said that the current focus was on ’sensible lending, transparency and proper risk management.’ He went on to say that the consultation had served to highlight the good and bad of how the property market operates, although he claimed that current solutions were ‘piecemeal, at best’.

He concluded that the consultation provided an excellent chance for those in the industry to work together in order to build on existing good practise, as well as to eradicate the more unwelcome practices in the sector to improve regulation and standard and increase customer protection. ‘Greater regulation is needed from government’, he said.

The main recommendations of the consultation point towards the need for landlords, managing and letting agents to be subject to appropriate legislation so that sufficient customer protection and market efficiency and consistency can be ensured.

The RICS also recommended that industry regulation should be undertaken by an independent body that would approve and enforce the agreed standards and codes of industry practise. It stated that this should be backed up with government legislation giving the body sufficient authority to ensure compliance throughout the industry, as well as providing a review of current legislation within the residential sector.

Finally the RICS is convinced that the industry as a whole must ensure that consumer clients are aware of the exact payments made, including remuneration, commission and insurance.

Should proper regulation not be focused on this may greatly impact many home owners and potential home owners alike, possible preventing them for getting the best value possible for a home on their mortgage as well as prevent many first-time buyers from acquiring a good home or even directly affecting re-mortgage value.

From February 2010, the internet’s most ubiquitous search engine giant will be eliminating the middleman and taking on the big real estate professionals in their own backyard. As a result of the shake-up that may well ensue, selling and buying homes and properties may never be quite the same ever again. Google, with their plans for a house-sales website in the UK, plan to turn everyone into potential estate agents.

Despite Google’s reticence to discuss actual plans a number of estate agents have indicated that they have been negotiating with Google with regards to the website. Google Real Estate in the UK may well end up being reminiscent of the property site currently running in Australia, where Google real estate started running in July 2009. This subsequently revolutionised the way in which houses are bought and sold, as consumers have been empowered to take all matters regarding selling and buying into their own hands, negating the need for an estate agent. Still, it may not offer some of the professional and experienced assistance that may come along with many agents in help prospective buyers locate the best mortgage deal around, so it can’t be seen as a complete replacement tool as of yet, especially for many first time buyers.

The service from Google’s site is free, and all individual homeowners and landlords can utilise it as can professional estate agents. The service works by sellers e-mailing the details and images of their properties to Google, which subsequently puts the images and details into a database called Streetview. Analysts in Australia state that the service has cracked the real estate market, pointing the way forward for sales of both residential and commercial property.

Despite the fact that up until this point estate agents have not lost a great deal of business. Most expect this to change radically during this year if Google’s service stays free, as sellers will no longer need to pay estate agents for a service they can undertake themselves. Analysts and estate agents in the UK believe that the same will probably happen here too, as long as the Google service is free. If it isn’t forecasts are that it could fail.

Some agents are already experimenting with what they call a ‘mew media strategy’, including interactive websites and oft-updated blogs. By so doing they believe that Google’s service will complement what they are already doing. This is, however, still quite an unusual way of doing things, as the majority of estate agents still simply advertise properties on websites, relying principally on printed literature as well as personal trips to branch offices. Some believe that, whilst such private sales are much discussed, this method still accounts for only 5% of current sales.

The possibility of a powerful recovery in bargain property stock is fuelling interest in the sector – particularly with the very wealthiest investors – with this group of people forecast to boost property allocations up to 30%. Among the most wealthy investors, it may not be out of the ordinary for their portfolios to contain over 50% of property holdings. Current market conditions appear to have resulting in investors regarding the expense of financial as detrimental, whereas the perceived mid-long-term potential prospects has overtaken the allure of stocks and bonds. Currently, the US residential property market is most favoured by investors.

Indeed, according to recent figures the richer the investor the greater likelihood that they will choose to invest in property. According to the figures from the survey by Barclay’s, double the number of investors plan to increase their investments in both commercial and residential properties as opposed to those looking to reduce. The investors currently at the head of the property investment field are those with in excess of $800,000 to invest, and the sheer scale of their plans for the sector appear to have taken analysts and researchers very much by surprise.

One major factor behind the phenomenon is that, with the global recession having suppressed property prices in all regions with the exception of certain parts of Asia, many properties are now undervalued, thereby stoking the trend for rising property investment. In fact, property investment among wealthy investors looks primed to climb to 30% of the average portfolio during the course of the next few years, compared to 28% at present according to Barclay’s researchers. The research does not include those properties used by investors as a main residence.

The study also found that investors from the Gulf States and Canada were among those more likely to raise their property allocations both domestically and overseas. The average increase in real estate looks set at 4% among these investors. The only country likely to see investors reducing their proportion of property investments in their portfolios was Spain. In Spain, roughly 60% of wealthy investors have more than half of their assets sunk into property.

Three out of four respondents stated that residential properties seem an attractive option, with two-thirds choosing to invest in commercial properties. Despite this, around 75% of those asked said that they felt restricted by the current cost of borrowing, though in some locations are still able to take advantage of some of the best mortgage rates available for quite some time. Still, this fact is an exception rather than a norm amongst the current fluctuating property market.

Despite the fact that property is now generally more affordable for first-time buyers in the UK than at any time recently, this is only true in some areas-with figures suggesting that it may only be the case in four out of ten areas compared to those seeking a re-mortgage. The main culprit for giving many first-time buyers problems is the intial deposit required to buy a house, as whilst the average property price of a house purchased by a first-time buyer in 2009 fell by 10% on its 2008 levels to stand at £133,794, the average deposit put down stood at just under £30,000-a huge outlay. For many young, first-time buyers without parental help, this figure will most likely price them out of the housing market for some considerable time to come, and will obviously hit those without savings especially hard. Interestingly, the average age of first-time house purchasers has remained at approximately 31% for the past several years, whilst the average age of first-time buyers doing so sans financial aid from family has risen from 33 to 37 over the last two years. The Council of Mortgage Lenders believes that the increasing stringency of lending criteria throughout the credit crunch has made it extremely hard for young people to obtain a mortgage without some kind of aid towards getting the deposit together.

The number of house buyers buying a property for the first time now stands at its lowest point since November 2008, with figures from the National Association of Estate Agents showing that only 19% of those buying houses in November 2009 were first-time buyers, whilst the comparative figure for May 2009 stood at a much more inflated 45%. Many analysts feel that parental help is still a vital feature for young first-time buyers being able to get their feet on the property ladder in times of such inflated deposits for those attempting to save for a deposit out of their incomes whilst simultaneously paying rent. It is something of a dichotemy for first-time buyers as they, on the one hand, witness house prices fall, but on the other hand, see the details of the mortgage products on the market change immeasurably, with deals tiered by the level of available deposit. Clearly, the very best deals will go to ‘prime candidates’, those typicaly able to amass a deposit of between 35-40% seeing the best rates. Those unable to do so are not necessarily disbarred from the housing market, but they will have to pay much more.

A recent survey by major insurers has found that property owners whose portfolios contain uninhabited properties should seriously look into determining and availing themselves of the appropriate levels of legal expense coverage in case of squatter occupation affecting their vacant properties.

Aviva, one of the UK’s leading companies, there may be around 20,000 squatters living in the UK. And, despite the fact that domestic properties seem to be generally more at risk from squatting, commercial property owners who own empty buildings as well as private-sector landlords may be equally vulnerable to squatting, in turn lowering property value and thus affecting mortgage value as well.

Mike Colmans, Aviva’s underwriting manager, stressed the importance of putting adequate protections in place in order to stop squatters gaining entry to properties and taking ownership of them. “Once squatters are there, it can be extremely difficult to remove them,” Mr Colmans said, going on to point out that, in his experience, he had witnessed squatters taking possession of such commercial properties as seasonal businesses, which often remain dormant for periods of time. He also discussed the problems associated with gaining interim possession orders from courts in order to have the squatters ejected.

Such procedures are often very expensive and time-consuming. Mr Colmans is certain that it is the duty of brokers to bring the attention of property owners to what is becoming an increasing problem and also to discuss possible security measures that can be taken, if they have not been already. Such measures might include sealing letterboxes in order to stop the accumulation of postal deliveries-a sure sign to those outside that a building is uninhabited.

It is also a wise idea to put up perimeter fencing, as well as thinking about such measures as security patrols, the installation of more lighting and improving locks, alarms and CCTV measures. Also, owners should double check that utilities supplies such as gas, water and electricity have been turned off at the mains. Isolation values should be chained and padlocked, where manageable.

It is imperative that property owners undertake such regular checks on their premises, as they are considered mandatory should a claim need to be made. If, in the event of an insurance claim, the insurer examines the security measures taken by the property owner and finds them to be inadequate and that sufficient measures have not been put in place to protection an uninhabited property, they may well refuse to pay out.

He also pointed out that periodic checks on a vacant property are mandatory, for in the event that a claim needs to be issued insurers may not actually payout if they feel that appropriate measures to protect the property have not been implemented in a timely manner and due diligence was not exercised. This is especially important for those looking to use the property for a re-mortgage to finance further investments as well as it will most likely have a major negative impact upon the mortgage values able to be granted.

For many people home refinancing is a good option to help them with their finances, but as the financial crisis has shown us, home financing might not be such a good idea for many home owners; refinance, it may be good idea to analyse their options, not based upon the fickle markets, but dependant upon your own finances and how well you think they will be able to accommodate an extra burden or maybe if a home refinancing option should you take a hit to your current income. It may turn out to not be as appealing as it initially seems. Firstly, calculate the payments over the whole term of the mortgage, remembering to factor in the full range of charges and fees that may be incurred. Many refinancing or second mortgage options may have lower interest payments but be spread over a longer term, or have no initial transfer fee, but charge higher interest as a result. The second main thing to look out for is what will happen should payments be defaulted. It is always risky to leverage your home against debt, and whilst this is a life saver in some circumstances it could spell disaster. Think on the following points: • Will you save money in the long term? • Have you made yourself aware of all of the small print such as the change in type of loan? Some types of loan have more safeguards than others-by refinancing are you changing your mortgage type? • Have you made yourself fully aware of other options, for example it may be better to transfer existing debts into a special debt consolidation loan rather than to leverage your house. • If the worst happens, such as you losing your job, will you still be able to cover the costs, if only for a couple of months till you find another?

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